The SME Financing Legal Issues

Together with large enterprises, SMEs in our country play a more and more important role in economic development, building the foundation of social and economic development and becoming its most active economic cell. The healthy development of SMEs is vital to the achievement of target as keeping economic growth, assuring employment, structural adjustment. Among all the factors constraining the development of SMEs, the financing difficulty is undoubtedly the most important and most deadly one. Since the global financial crisis in 2008, SMEs in all regions of the country facing financial difficulties, particularly those in the economically less-developed Province like Guizhou. In recent years, the financing environment has been improved and SMEs has been developed, playing the role of increasing employment opportunities and re-employment, promoting urban and rural economic development, optimizing the economic structure. However, influenced by the financial crisis and internal and external impact of local operating environment, the underlying problem remain unresolved and most of the SMEs in Guizhou Province facing a bottleneck.The situation of "strong power, weak position" can be changed by strengthening the study on solving financing problems of SMEs and removing barriers to ease the financing difficulties of SMEs. In this way, SMEs can play a more important role in the economic development in future. Therefore, study on legal issues of SMEs financing has important practical significance.This paper starts from Guizhou Province, studying on financing difficulties of SMEs from a legal point of view. First, analyze the present situation of financing problems on SMEs and the legal environment of a variety of financing sources including internal financing and external financing, direct financing and indirect financing, equity capital financing and debt financing. Second, study and learn the experience of domestic and foreign countries, regions in supporting SMEs financing, such as the market-based financing model in United States, the Japanese government-led funding model and related legal system environment and good financing situation, legal system and policy environment in Zhejiang. Finally, this paper put forward effective measures which fit the development of SMEs in our country to solve financial problems in the case of Guizhou Province, including improve SME financing system innovation and SME financing regulatory innovation and formulate laws, regulations and policies in line with our SME financing.